The Renewable Heat Incentive Explained

What is the Renewable Heat Incentive?

The Renewable Heat Incentive (RHI) is a government scheme that provides payments for the generation of heat from several different renewable energy sources. It was introduced in November 2011 to replace the Low Carbon Building Programme in encouraging more people to invest in renewable forms of heating. The Renewable Heat Incentive has distinct schemes for commercial and domestic projects. You can find our breakdown of the Commerical Renewable Heat Incentive here.

For the Domestic RHI, payments are calculated by the heat generation of the installation and made quarterly over a 7 years period. The rates vary slightly depending on the number of people claiming, which is a monthly adjustment known as digression. For the current rates, check our RHI technology page here.

The Renewable Heat Incentive is set to run until the 31st of March 2021.

Technologies Available on the Renewable Heat Incentive

Biomass boilers

Biomass boilers use essentially the same as the gas boilers that you’d find in 80% of UK homes, except that fuel source is provided by small, sustainably sourced wood pellets.

Air-to-water Heat Pumps

Air source heat pumps use the ambient heat found in the air outside your house and compress it using electricity. This compression causes the extracted warmth to heat up further and then be released into your home. Only air-to-water heat pumps are eligible for the RHI.

Ground source heat pumps

Similar to air source heat pumps, but a ground source heat pump pulls the heat from the ground, making it a whole lot more efficient. Ground source heat pumps require extensive pipework and a lot of open land, however once installed they are one of our favourite ways to heat your home.

Water source heat pumps

Though you don’t see it written about all the often, water source heat pumps are indeed part of the RHI scheme. In all the paperwork they fall under the umbrella of a ground source heat pump, but this is very poorly explained so it’s often missed.

Solar Thermal

Also known as solar heating, solar thermal harnesses the energy provided by the sun to provide thermal energy to heat water. Only flat plate and evacuated tube solar panel systems are eligible.

For the commercial Renewable Heat Incentive, slightly different technologies are covered. Details of the eligible systems for both the commercial and domestic RHI can be found here.

Problems with the Renewable Heat Incentive

The RHI was initially introduced in the Energy Act 2008, but it took until the spring of 2014 to be implemented. The 6 years that it took for the project to come to fruition caused a lot of people a lot of problems.

In Northern Ireland, problems with the RHI funding caused a huge political scandal. The rate paid to recipients was more than the cost of the fuel, so people and businesses were making a profit just by heating their homes. Heating on full blast with no one home. It’s been estimated to have had a public cost of around £500 million, and directly led to Martin McGuinness’s resignation as deputy First Minister of Northern Ireland.

Here at the GreenAge, we think it’s a hugely flawed system. Although you will make back a large proportion (or even more) of your original outlay, the RHI system means that you need to have a significant amount of disposable income to begin with; ground source heat pumps cost upwards of £25,000. Even though this money will be recouped over the payback of the 7 years, it limits the people able to get one to those that have thousands of pounds lying around. These are then the people that benefit from the lowered heating costs and Renewable Heat Incentive quarterly payments. The RHI is, therefore, a scheme designed only to encourage renewable adoption and cheaper heating for the wealthy, with very little accessibility for lower-income families. This is a pervasive problem within UK renewable subsidies and one that we are really not fans of.

Should I apply for the Renewable Heat Incentive

If you’re getting any of the eligible technologies installed on your property then yes you should absolutely apply for the RHI. The quarterly payments will go a long way to helping you recoup the initial expenditure of getting the tech installed.

To find a trusted local installer of RHI eligible tech in your area, fill out our contact form here and we’ll be in touch.

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